RBI Functions and Structure
The Reserve Bank of India (RBI) is the central bank of our country. It is also known as the 'Apex Bank' because it sits at the top of the entire banking system. It was established on April 1, 1935, based on the Hilton Young Commission’s suggestions. Initially, it was a private bank, but the government nationalized it in 1949. This means the government took full ownership to align the bank's goals with national interests. The RBI's main office moved from Kolkata to Mumbai in 1937.
Concepts (4)
This is a critical function where the RBI acts as a safety net for all commercial banks. If a bank faces a sudden shortage of cash and cannot borrow from other banks, the RBI provides the necessary funds.
This is a critical function where the RBI acts as a safety net for all commercial banks. If a bank faces a sudden shortage of cash and cannot borrow from other banks, the RBI provides the necessary funds. This prevents the bank from collapsing and protects the depositors' money. For example, if a bank is in trouble, the RBI provides a loan to keep it running.
These are tools for short-term borrowing, usually for less than a year. Examples include Call Money (1 day), Notice Money (2-14 days), and Commercial Paper.
These are tools for short-term borrowing, usually for less than a year. Examples include Call Money (1 day), Notice Money (2-14 days), and Commercial Paper. Commercial Paper is 'unsecured,' meaning the company doesn't give any property as a guarantee. These tools help the government and companies manage their daily cash needs.
> 🔔 **Latest Update (20 Dec 2025):** [Source](https://www.rbi.org.in/BS_PressReleaseDisplay.aspx?prid=61854) > >
🔔 Latest Update (20 Dec 2025): Source
The MPC is a six-member committee headed by the RBI Governor. Its main job is to decide the 'Repo Rate' to keep inflation under control. They aim to keep inflation at 4% with a margin of 2%.
The MPC is a six-member committee headed by the RBI Governor. Its main job is to decide the 'Repo Rate' to keep inflation under control. They aim to keep inflation at 4% with a margin of 2%. If inflation is too high, they increase the Repo Rate to make loans more expensive, which reduces the money supply in the economy.
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